What's it cost to build a house?

[Pandora]

Dennis family.
We did house and land with fixed site costs. Places won't generally do that if you have your own land already though

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Gudism - we live in an absolutely brilliant pro-development council. They have a grand plan for this town that involves pretty serious expansion so there are small and large subdivisions all over the town, and some have been required to build roads and run power like you said as you need street frontage here to subdivide. They let us subdivide our block despite it being 1m too narrow and not complying with modern building codes (the existing house was ON the boundary and has two windows on the boundary wall - it was built in about 1900). We can have gravel driveways! We've created a tonne (if not several) of demolition rubble fixing the old house but most of it has disappeared as neighbours ask to take it for scrap metal, firewood, building their own stuff etc.

I'd love to build a duplex here. That might be a good option for the OP - get a wide block (check council development plan as to how wide - here you need a 20m wide block to do it and there's plenty of blocks that size available), build what is effectively two long, thin houses joined in the middle at a common firewall under one roof but with separate electricity and water meters, and after the house is finished you can subdivide it into two titles at your leisure, taking it from a dual occupancy duplex to a strata or even a plain old torrens titled duplex.

I have no idea how that would work for financing though, you'd probably all need to go on the one loan to do that and then buy each other's halves out when you subdivide it later. And you'd have to be damn sure you can subdivide it later or you won't be able to have your *own* halves.

[The_Gudism_Master]

RumpledElf - great to see a council that isnt a PITA and bends their planning scheme and is reasonable

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Oh - one more thing. MONEY. Not trying to put you off the idea, but ...

Say you buy an old house on a big block that suits your requirements for $400k (pulling numbers out of thin air here). You demolish it straight away costing $20k, then subdivide for $40k, then you start to build. While you are waiting for all this to be approved, *someone* has to pay interest on $460k (less deposits) and that is a lot of money and depending on the council you could be waiting up to three years from buying your house to moving into your new house.

Can you really afford that? What legal protection are you going to have if there are multiple people involved in purchasing the land? You might have a falling out during that time or one couple finds their dream house elsewhere and wants out, leaving the other couple with the full debt.

Also you may have huge difficulties getting a loan to build the house, if you have say 2 couples involved in the initial purchase and all 4 people are on the loan, while they won't tell you this upfront, when it comes to assessing serviceability (how much you can repay) the banks will decide that each person is responsible for the whole $400k not $100k each, and when it comes time to get the loan to build the house you find you are all in too much debt to get extra money for the house because of the way the bank deems responsibility for the debt.

Just things to watch out for.

[Miss E]

Thanks so much for the info ladies. At this stage it is just an idea and I was hoping to see if the budget we have in mine is doable iykwim? Generally speaking a 3 bed house in my area goes from anywhere between $1 and $2 Million. Something that we'd be happy with would be about $1.5 million (out of our reach right now).

What we're hoping is that we can sell our current property and come out with enough to purchase 50% of a block of land. In the meantime we'll rent while we go through the permits, sub-division and building process so we're not paying two mortgages, just the one lot of rent. We'll then borrow to fund the building.

Working roughly, we're thinking that if we can get a suitable block of land for $1 million (split 50/50 with either my Dad or some really good friends who are in a similar position) and then have $300,000 for our share of the subdivision and building it is something that is worthwhile doing. After all it would allow us to have a suitable long-term house in the area that we love, that would cost us a lot less than it would ultimately be worth. But the problem is there are so many variables involved, what if you buy something, pay to have plans drawn up and then can't get the subdivision? It's such a big leap of faith to take...

Gudism can you explain how it works with Units or a duplex? Can you set up your own Owners Corporation and side step the subdivision process that way?

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Gudism can you explain how it works with Units or a duplex? Can you set up your own Owners Corporation and side step the subdivision process that way?

I'll give it a go in the meantime - two or more houses on one title is 'dual occupancy' and needs nothing special, but you can run into issues with council doing that and you cant sell the houses/units separately. But it can be a really good way to start just because of no subdivision costs.

You're thinking Strata titling, which I'm a bit vague on. You still split it up - I have no idea how it works or how much it costs - and then have some kind of entity handling the strata stuff, which covers common areas. You can set up your own entity. Everyone in the strata pays a bit each quarter into some magic strata fund that is used to do things like maintain common areas (for large blocks of units this is things like the roof, common parking area, driveway, outside lighting, pools, lifts etc). You can sell the houses/units separately with strata titles. The rules for sizes and so forth on strata divisions is wildly different for a normal subdivision, strata is most often used where there is common land or multiple storeys with units above each other and you can't physically divide the units up onto discrete blocks of land.

[Arimeh]

Hey Miss E - DH is at work right now, but I'll get him to look at this when he gets home tonight

(if you didn't already guess, yes, Gudism is my other half)

[~Phoenix~]

We are going through this at the moment - I bought the house 8 years ago and it's more cost effective to knock down and rebuild than to try and renovate or sell & buy something equivalent to what we are building since we are only 6km's from CBD. We aren't subdividing though.

Demolition - $10K
House - 3 bedrooms, 2 bathrooms + study $265K - when we sat down with builder we told them everything we wanted included such as luxuries as stone bench tops/floor to ceiling tiling in bathrooms/ extra coat of paint etc in price so we weren't hit with any hidden extra's and we could take out if we needed to reduce cost
Extra's - flooring, blinds, aircon/heating, rainwater tanks, driveway, fencing etc $50K

[The_Gudism_Master]

Gudism can you explain how it works with Units or a duplex? Can you set up your own Owners Corporation and side step the subdivision process that way?

explained by RumpledElf as well as I can explain.